Government Uncovers TRICARE $100M Compounding Fraud Scheme

Recently, twelve defendants including doctors, pharmacy owners and marketers were charged in a $100 million TRICARE compounding fraud scheme according to John Parker, U.S. Attorney in the Northern District of Texas.  TRICARE is an insurance program for active-duty and retired military and their family members.

“The indictments and arrests in this investigation highlight another step forward by DCIS and its law enforcement partners to protect the integrity of the Department of Defense (DoD) health care program known as TRICARE,” said Special Agent in Charge Janice M. Flores, of the DCIS Southwest Field Office. She continued:

Fraud and abuse by pharmacies and medical providers that bill for compounded prescriptions and/or medications is a significant threat to the DoD health care system. With DoD’s limited resources and budgets, DCIS must continue to aggressively investigate fraud, waste and abuse to preserve and recover precious taxpayer dollars for our most vulnerable programs.

Federal prosecutors said the scheme involved prescribing “compounded” drugs such as pain, scar and migraine creams to military families. The government allegations contend that from approximately May 2014 to mid-February 2016, the 12 defendants conspired to run a scheme to defraud TRICARE in connection with the prescription of compounded pain and scar creams. The scheme involved the payment of kickbacks to TRICARE beneficiaries, payment of kickbacks to prescribing physicians, and the payment of kickbacks to marketers by the owners of compounding pharmacies.

Government oversight bodies have questioned the spiraling federal spending on compounded drugs. Medicare spending on compounded topical drugs has surged 3,400% since 2006, the U.S. Department of Health and Human Services’ Office of Inspector General reported in June 2016.

More information for potential healthcare fraud whistleblowers is located at the Nolan Auerbach & White main website.  The Government cannot successfully win the fight against fraud without the help of courageous whistleblowers.